IRS Tax Extension: Lesser Known Important Facts

Filing tax returns is one of the most tedious and laborious things to do when it comes to tax management. You are supposed to fill the form 1040 and to do that, you have to gather all the documents and files you would need to complete the filing process. However, not everyone will be able to file their tax returns well before April 15 and sometimes not everyone will be able to gather all the documents they need before this time. Understanding this, the IRS allows for a provision called IRS tax extension that allows a taxpayer to extend the deadlines of filing tax returns from April 15 to October 15. Individuals need to fill out the tax extension form 4868 and businesses have to fill out 7004 to avail an extended period of 6 months. Well, is that all you need to know about IRS tax extension? Absolutely ‘No’! Read on to know why.

• There’s a general misconception among many taxpayers that IRS tax extension allows them to extend the deadlines of their tax payments as well. However, it is not the case and the deadline for paying taxes remain to be April 15 even if you file for an extension. An extension only allows you to extend the deadline for filing your tax returns.

• Filing of extension forms can be done online (e-file) or via post. E-filing is quick when compared to the latter and only those taxpayers who e-file gets a confirmation of their plea’s approval through a confirmation mail. They can also track the status of their form while it is entirely opposite in the case of postage.

• The penalties for not filing your tax returns before April 15 and also failing to file an IRS tax extension is generally heavy. The penalties can range from a minimum of 5% to a maximum of 25% of the overall tax due.

• As we know, April 15 aka Tax Day is the last date to file tax returns and make tax payments. In addition, April 15 is also the last date to file an IRS tax extension. So even if you are not able to file your returns by this date, make sure you file your extension forms without fail to avoid penalties.

• Well, the good news for the end! You don’t need any reasons for filing the IRS tax extension! The IRS doesn’t expect taxpayers to provide a valid reason for extending the deadline and that way you can be rest assured of your extension’s approval as long as you make mistakes or provide incorrect information while filling the form.

File Later has team of tax professionals helping individuals and businesses file for IRS tax extensions electronically, to extend their income tax filing deadlines, through an easy to use online application. To know more about IRS tax extension, visit Investmentnews.com.